Tax season tip: Exchange fees can reduce your tax bill

If you paid an insane amount of money on exchange fees last year, you can actually use them to reduce your tax bill.

In general, you can calculate your capital gains and losses through the following formula: Capital Gain/Loss = Gross Proceeds - Cost Basis

Any exchange fees that are related to buying Bitcoin can be added to your cost basis.

Meanwhile, any exchange fees that are related to selling Bitcoin can be subtracted from your gross proceeds.

If you’re too lazy to go back and find out how much fees you paid in each transaction for the year, there are crypto tax platforms that can automatically factor in fees when you’re calculating your taxes (I like CryptoTrader.Tax, but there are other ones out there too.)

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